CITATION: Romspen Investment Corporation v. Woods Property Development Inc., 2011 ONCA 817
DATE: 20111222
DOCKET: C53496 and C54375
COURT OF APPEAL FOR ONTARIO
Laskin, Rosenberg and Rouleau JJ.A.
BETWEEN
Romspen Investment Corporation
Applicant (Respondent)
and
Woods Property Development Inc. and TDCI Holdings Inc.
Respondents
Ronald Slaght, Q.C. and John J. Chapman, for the appellant Home Depot Canada Inc.
David P. Preger and Lisa Corne, for the respondent
Harvin D. Pitch, for the respondent SF Partners Inc.
Heard: November 18, 2011
On appeal from the orders of Justice Herman J. Wilton-Siegel of the Superior Court of Justice dated March 17, 2011 and September 28, 2011, with reasons dated March 17, 2011, September 28, 2011 and October 3, 2011, with the March 17, 2011 reasons reported at 2011 ONSC 3648, 75 C.B.R. (5th) 109 and the October 3, 2011 reasons reported at 2011 ONSC 5704.
Rouleau J.A.:
OVERVIEW
[1] The appellant, Home Depot Canada Inc. (“Home Depot”), appeals from two orders. The first order is dated March 17, 2011 and granted, in part, a motion brought by SF Partners Inc., the receiver of Woods Property Development Inc. (“Woods”), (the “Receiver”). It authorized the Receiver to sell the property known as 20 High Street in Collingwood, Ontario (the “Woods Property”) free and clear of any lien or claim of Home Depot. The motion judge, however, refused to approve the purchase of the Woods Property by 2204604 Ontario Inc. (the “Purchaser”) without further marketing efforts.
[2] The first order also dismissed Home Depot’s cross-motion requesting an order that it be entitled to purchase a portion of the Woods Property or to lease the Woods Property. Alternatively, Home Depot requested that it be entitled to a statutory lien pursuant to s. 37(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 or an equitable lien ranking prior to the mortgage over the Woods Property held by the respondent, Romspen Investment Corporation (“Romspen”).
[3] The second order under appeal is dated September 28, 2011. It approved the purchase of the Woods Property by the Purchaser and vested title in the Purchaser.
[4] Romspen and the Receiver cross-appeal the first order seeking to set aside the refusal, at that time, to approve the purchase of the Woods Property by the Purchaser and substituting an order approving the purchase. Romspen recognized that the cross-appeal is moot but argues that it raises issues of importance such that this court should exercise its discretion to hear it.
FACTS
[5] Woods is an Ontario corporation that owns the Woods Property. Romspen is a secured lender to Woods and Woods’ sister company, TDCI Holdings Inc. (“TDCI”). Romspen’s security includes an approximate $17 million mortgage over the Woods Property, which was used, in part, to discharge earlier mortgages given by Romspen (the “Romspen Mortgage”). The Receiver was appointed the interim receiver of all assets, undertakings and properties of Woods and TDCI by order of the Superior Court of Justice dated November 25, 2008. The Purchaser of the Woods Property is an Ontario corporation owned and controlled by Romspen.
[6] These appeals center on a store built by Home Depot on an 8.67 acre parcel of land, which forms part of the larger 43 acre Woods Property (the “Home Depot Lands”). Home Depot constructed the store at a total cost to it of approximately $14.5 million. The issue in the motions under appeal was the fate of that store and the Home Depot Lands. Specifically, whether Home Depot could retain the store and either lease or purchase the Home Depot Lands.
[7] On May 19, 2005, Home Depot entered into a purchase agreement with Woods for the purchase of the Home Depot Lands for a purchase price of $3.25 million. Among other terms, the purchase is conditional upon severance of the Home Depot Lands from the Woods Property in compliance with the Planning Act, R.S.O. 1990, c. P.13.
[8] The purchase agreement between Woods and Home Depot was amended on November 30, 2005 (the “Home Depot Agreement”). Romspen received a copy of the Home Depot Agreement. Home Depot, however, did not register a caution in respect of its rights under the Home Depot Agreement pursuant to s. 71(1.1) of the Land Titles Act, R.S.O. 1990, c. L.5.
[9] As the Home Depot Agreement is central to these appeals, I will outline the material provisions. The Home Depot Agreement provides as follows:
a portion of an industrial building located on the Woods Property is to be demolished to permit construction of the Home Depot store;
Home Depot is obligated to apply for a consent under the Planning Act to sever the Woods Property;
the Home Depot Agreement will be effective to create an interest in land only if the provisions of the Planning Act for severance are complied with;
Home Depot is entitled to apply to the Town of Collingwood for approval and a building permit to construct the Home Depot store on the Home Depot Lands;
if, within 270 days of the date of execution of the Home Depot Agreement, Home Depot fulfills all zoning conditions and obtains all necessary approvals for its proposed store, including a building permit, Home Depot will take possession of an area slightly larger than the Home Depot Lands pursuant to a ground lease (as there is no significance to the slight difference between the area covered by the ground lease and the area of land subject to the purchase agreement, both will be referred to as the “Home Depot Lands”);
the ground lease is to run for a term of 50 years at a rental of $300,000 per year for the first seven years and thereafter at $100 per year;
the ground lease will terminate upon the severance of the Woods Property under the Planning Act, at which point, the purchase of the Home Depot Lands by Home Depot will be completed and the rental payments already made will be credited against the purchase price;
prior to entering into the ground lease and as a condition thereof, Woods will deliver an acknowledgment of Romspen’s agreement to:
(a) permit the demolition of the existing industrial building without acceleration of the Romspen mortgages secured against the Woods Property; and
(b) provide a partial discharge of the Romspen mortgages upon payment of the purchase price of $3.25 million under the Home Depot Agreement, without requiring that the mortgages be in good standing at the time; and
- Home Depot is entitled to register a caution in respect of its rights under the Home Depot Agreement pursuant to s. 71(1.1) of the Land Titles Act.
[10] On May 4, 2006, Home Depot entered into the ground lease with Woods as contemplated by the Home Depot Agreement (the “Ground Lease”). Although the Ground Lease contained a provision relating to the registration of a notice of Ground Lease pursuant to s. 111(1) of the Land Titles Act, Home Depot did not register the notice nor did it obtain an express postponement or subordination of Romspen’s rights as mortgagee.
[11] In the Ground Lease, Woods represented that it had obtained the acknowledgment from Romspen contemplated in the Home Depot Agreement to the effect that Romspen had agreed that:
the demolition of the portion of the industrial building would not accelerate the Romspen mortgages on the Woods Property at the time so as to allow construction of the Home Depot store; and
Romspen would provide a partial discharge of its mortgage should Home Depot purchase the Home Depot Lands.
[12] Romspen had agreed to the demolition of a portion of the industrial building but denies that there was any agreement respecting the partial discharge of the mortgage. The materials filed in the motion show that Woods requested that acknowledgment but that Romspen refused to give it. The motion judge simply observed that: “It is unclear on what basis Woods gave the representation”.
[13] To allow construction of the Home Depot store, Romspen signed a site plan control agreement dated July 20, 2006 to which Woods, Home Depot and the Town of Collingwood were also parties (the “Site Plan Agreement”). The Site Plan Agreement refers to the Home Depot Agreement as well as to the demolition of the portion of the industrial building and the proposed construction of the Home Depot store. It also refers to the existence of the Romspen mortgages and contains an express postponement and subordination by Romspen of its interest in the Woods Property to that of the Town of Collingwood. There is no postponement or subordination by Romspen to Home Depot.
[14] Home Depot applied for severance of the Home Depot Lands but the Town of Collingwood will not consent to the severance until a comprehensive plan of subdivision is filed and approved for the entire Woods Property.
[15] The Home Depot store was constructed and has been operating since early 2007.
[16] Woods first defaulted on the Romspen Mortgage in 2007. Payments ceased on the Romspen Mortgage in early 2008, leading to the Receiver’s appointment. The receivership order authorized the Receiver to market the Woods Property. After approximately 10 months, the Receiver accepted the Purchaser’s offer dated October 13, 2009 regarding the sale of the Woods Property for a purchase price of $14.1 million (the “Purchase Agreement”). The Purchase Agreement is conditional upon the Woods Property being delivered free and clear of any claims of Home Depot unless arrangements are reached on terms satisfactory to the Purchaser in its sole discretion. No such arrangements were reached. The proceeds of the sale are insufficient to cover the indebtedness owing to Romspen under its mortgage.
[17] The Receiver moved for court approval of the Purchase Agreement and for an order vesting title to the Woods Property in the Purchaser. Home Depot took the position that the Receiver could not sell the Woods Property on which the Home Depot store is located free and clear of any interest of Home Depot and argued that it should be entitled to purchase the Home Depot Lands or to a lease or, alternatively, to a statutory or equitable lien ranking ahead of the Romspen Mortgage.
[18] In very thorough reasons, the motion judge laid out the factual situation and the relevant case law. He concluded that Home Depot’s leasehold interest in the Home Depot Lands ranked after the Romspen Mortgage and, although Home Depot was entitled to an equitable lien against the Woods Property, that lien was subordinate to the Romspen Mortgage. He then considered the equities between the parties in relation to the specific issues and concluded that the equities favoured Romspen.
[19] Accordingly, in the first order, he authorized the Receiver to proceed with the sale of the Woods Property free and clear of any lien or claim of Home Depot. That is, he vested out or expunged any interest Home Depot had in the Woods Property. The motion judge, however, refused to approve the Purchase Agreement at that time and ordered the Receiver to conduct a further sales process in respect of the Woods Property.
[20] Further efforts at finding a purchaser for the Woods Property were unsuccessful and a new motion was brought seeking the approval of the Purchase Agreement. On September 28, 2011, the motion judge granted the second order approving the sale transaction and vesting the Woods Property in the Purchaser free and clear of any lien or claim of Home Depot.
[21] By order of this court, the motion judge’s order approving the sale transaction was stayed until the hearing of the appeals or further order of this court.
ISSUES
[22] Home Depot raised several grounds of appeal. In oral submissions, however, Home Depot focused on the following two grounds:
Did the motion judge apply an incorrect standard of proof? Specifically, did his failure to draw reasonable inferences render his findings of fact unreliable?
Did the motion judge fail to consider the ownership of the Home Depot store separate and apart from the Ground Lease?
[23] I need only deal with the first issue as, in my view, it is dispositive of the appeals. The motion judge’s misapprehension of the standard of proof requires that the orders be set aside and that the matter be remitted to the Superior Court of Justice for a new hearing. As I would remit the matter for a new hearing, I would dismiss Romspen and the Receiver’s cross-appeal of the first order.
ANALYSIS
Applicable Law
[24] The parties agree that the criteria to be applied by the court in a receivership sale are those set out by this court in Royal Bank of Canada v. Soundair Corp. (1991), 1991 CanLII 2727 (ON CA), 4 O.R. (3d) 1 (C.A.). At p. 6, this court summarized the factors a court must consider when deciding whether a receiver , who has sold a property, acted properly:
It should consider whether the receiver has made a sufficient effort to get the best price and has not acted improvidently.
It should consider the interests of all parties.
It should consider the efficacy and integrity of the process by which offers are obtained.
It should consider whether there has been unfairness in the working out of the process.
[25] The central issue raised on the motions and in these appeals is the application of the second criterion, the consideration of the interests of all parties, when deciding whether the court should vest the Woods Property in the Purchaser free and clear of Home Depot’s interest. In considering this criterion, the motion judge referred to Ground J.’s statement in Meridian Credit Union Ltd. v. 984 Bay Street Inc., 2006 CanLII 26476 (Ont. S.C.), at para. 19, that: “[I]n determining whether to issue a vesting order terminating the interests of parties in a property, the court must review the equitable considerations supporting the respective positions of the parties.” The motion judge then set about making the findings of fact necessary to apply these legal principles.
Position of the Parties on Appeal: Standard of Proof in Making Findings of Fact
[26] Home Depot argues that the motion judge committed an error of law in the standard of proof he applied when making findings of fact. Throughout his reasons, the motion judge indicates that he is required to make factual determinations “on the basis of undisputed facts” and that he “cannot make findings of fact by way of inference.” Home Depot maintains that this is clearly an error and that the failure to apply the correct standard of proof resulted in the motion judge’s failure to draw reasonable inferences from the evidence.
[27] Home Depot submits that several important inferences were available on the evidence. Specifically, it could be inferred from the evidence that Romspen gave its express or implied consent to the construction of the Home Depot store and to entering into the Ground Lease. Alternatively, Home Depot submits that if there is no express or implied consent, the record is sufficient to draw the inference that, from the outset, Romspen knew about the construction of the Home Depot store, knew about the Ground Lease and knew or ought to have known that Home Depot believed it had Romspen’s consent to build the store and enter into the Ground Lease. These and other possible inferences, if drawn, would have been relevant considerations in the exercise of the court’s equitable jurisdiction when deciding whether to vest out Home Depot’s interest and/or whether to grant Home Depot some form of equitable relief.
[28] The respondents could provide no legal basis for the motion judge’s statement that factual findings must be made on the basis of “undisputed facts” and that the court could not “make findings of fact by way of inference.” It may be that, because this was a motion argued on affidavit evidence, the motion judge understood that he was constrained in this way. In any event, the respondents did not seriously dispute that these constituted errors, rather, they argued that these errors were harmless because:
there were no disputed facts;
the errors were mere inadvertent slips and, when read as a whole, it is apparent that the motion judge nonetheless applied the appropriate standard of proof;
it was clear from the evidence that Romspen’s mortgage had legal priority over any interest Home Depot had in the Woods Property;
there was insufficient evidence on the record before the motion judge from which actual or implied consent to the Ground Lease or construction of the Home Depot store could be drawn; and
even accepting that the court could infer or imply consent, the equities nonetheless favoured Romspen and the vesting out of Home Depot’s interest.
DISCUSSION
[29] In my view, the appeals must be allowed and the matter remitted to the Superior Court of Justice for a new hearing. I acknowledge that, in granting equitable relief, motion judges have a good deal of latitude and ought to be afforded considerable deference. As set out by this court in York (Regional Municipality) v. Thornhill Green Cooperative Homes Inc., 2010 ONCA 393, 68 C.B.R. (5th) 73, at para. 20, an order approving a sale by a receiver is discretionary and attracts great deference from appellate courts. Appellate courts will only interfere where the trial judge (or the motion judge) “erred in law, seriously misapprehended the evidence, exercised his or her discretion based upon irrelevant or erroneous considerations, or failed to give any or sufficient weight to relevant considerations.”
[30] In the present case, however, the motion judge’s application of an incorrect standard of proof and his belief that he was not allowed to draw inferences on a motion such as this one are errors that go to the very basis upon which the court’s equitable discretion is exercised: the factual matrix. As explained by Rothstein J. in F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 40, “there is only one civil standard of proof at common law and that is proof on a balance of probabilities.” Therefore, facts in issue are to be proved on a balance of probabilities and, as a general rule, this applies to motions[^1] as well as to trials.
[31] As I will explain, the errors committed by the motion judge are not, as suggested by the respondents, harmless. Had the motion judge applied the appropriate standard of proof and been willing to draw inferences where appropriate, the result may well have been different. I turn now to the five points raised by the respondents in response to the appeals.
1) There were no disputed facts
[32] The respondents argue that the motion judge’s adoption of a higher standard of proof – undisputed fact – is a harmless error as there was no dispute as to the facts. It was therefore unnecessary for the motion judge to engage in an assessment of the weight to be given to the evidence or to make credibility findings.
[33] The argument put forward by Home Depot, however, is not that it disputed the facts set out in the record, but rather that the motion judge ought to have drawn inferences from the record and the conduct of the parties.
[34] Inferences are not undisputed facts and, as a general rule, inferences need only flow reasonably and logically from established facts. By limiting himself to undisputed facts, the motion judge did not assess the landscape of facts presented to him with a view to determining what inferences could appropriately be drawn.
[35] The potential importance of inferences is apparent when considering whether Romspen’s interest in the Woods Property should be subordinate to the Ground Lease by virtue of Romspen having consented to it. In dealing with this issue, the motion judge set out the law as follows, at para. 142: “[I]f a lease is executed by a mortgagor after the mortgage has been granted, the mortgagee will be bound by the terms of the lease if it is made with his express or implied consent” (footnote omitted).
[36] The record did not contain an express consent by Romspen. The relevant question on the issue of subordination was, therefore, whether consent by Romspen to the Ground Lease could be implied. Home Depot argued that the conduct of Romspen and the various documents in the record were more than sufficient to show that consent ought to be implied.
[37] The motion judge, however, does not appear to have turned his mind to the issue of implied consent. The motion judge simply stated, at para. 145, that: “Home Depot has failed to establish as an undisputed fact that Romspen consented to either the Home Depot Agreement or the Ground Lease” (emphasis added). The motion judge’s use of the expression “undisputed fact” clearly reflects his understanding that, absent Romspen expressly acknowledging that it consented to the Ground Lease or it being set out in the written materials, he could not find that Romspen had consented. In effect, the motion judge excluded the possibility of finding an implied consent because of his belief that he was somehow prevented or unable to draw appropriate inferences from the available facts. Inferences are important tools in the fact-finding process and the motion judge erred in refusing to avail himself of that source.
2) The errors were inadvertent slips
[38] The respondents argue that the motion judge’s references to the need for “undisputed facts” and his inability to “make findings of fact by way of inference” were simply inadvertent slips and that, read as a whole, it was apparent that the motion judge nonetheless applied the appropriate standard of proof.
[39] I disagree. A critical portion of the motion judge’s reasons is the portion dealing with Romspen’s knowledge and alleged consent to the Home Depot Agreement, the Ground Lease and the construction of the Home Depot store. In that portion of his reasons, he repeats, at paras. 40 and 44 of his March 17, 2011 reasons, that the court must make its determination on the basis of “undisputed facts”. He also states, at para. 40 of those reasons, that the court “cannot make findings of fact by way of inference.” After making these statements, he concludes, at para. 52, that “[t]here is no evidence of any such consent, and it cannot be inferred from the existence of the Home Depot Agreement. Nor can it be inferred from the existence of the Ground Lease” (emphasis added). The motion judge then goes on to state, at para. 53, that “Home Depot cannot, however, establish as an undisputed fact that Romspen’s execution of the Site Plan Agreement either constituted, or evidenced, its consent to ... [the] construction [of the Home Depot store]” (emphasis added).
[40] However, despite the motion judge having stated that he could not draw inferences, the respondents argue that his statement that he did “not think that ... knowledge [of the Ground Lease] could be inferred” (at para. 42), suggests that he did in fact consider whether inferences could be drawn. I disagree.
[41] When that statement is viewed in the context of the entire paragraph, it does not, as the respondents suggest, indicate that the motion judge was applying the correct standard of proof. The balance of the paragraph shows that the motion judge was still operating on the premise that Home Depot had to demonstrate either actual knowledge or knowledge as an undisputed fact.
[42] The fact that the motion judge applied the incorrect higher standard of proof is confirmed later in his March 17, 2011 reasons where, at para. 145, he confirms that he has “concluded that Home Depot has failed to establish as an undisputed fact that Romspen consented to either the Home Depot Agreement or the Ground Lease” (emphasis added).
[43] Further, it was central to Home Depot’s case to determine whether knowledge or implied consent of the Ground Lease and construction of the Home Depot store could be inferred from all of the circumstances. Given the motion judge’s extensive and comprehensive reasons, I simply cannot accept that, had he understood that he could draw reasonable inferences from all of the facts and circumstances, his analysis of whether to draw the inference would be limited to a single paragraph without reference to the facts both for and against drawing such an inference.
3) Romspen’s mortgage has legal priority
[44] The respondents submit that the errors are of no consequence because the Romspen Mortgage had clear legal priority over any Home Depot interest and the funds generated from the sale of the Woods Property are not even sufficient to pay off the mortgage debt. Moreover, nothing in the record suggests that Romspen ever intended to waive any of its legal rights.
[45] The respondents argue that the motion judge correctly weighed the equities between the parties. More specifically, in granting the Receiver’s request for an order vesting out the interest of Home Depot in the Woods Property, the motion judge stated, at para. 187, that:
[T]he court must consider the equities between the parties in the context of findings that:
(1) Romspen’s interest in the Woods Property ranks ahead of that of Home Depot to the extent of the monies secured under the Romspen Mortgage ... ;
(2) Home Depot’s equitable lien against the [Woods] Property arising as a result of the construction of the Home Depot store does not rank prior to the interest of Romspen in the [Woods] Property; and
(3) Home Depot is unable to establish as an undisputed fact that Romspen consented to the Home Depot Agreement, the Ground Lease or the construction of the Home Depot store in a manner that was intended to affect its rights in the [Woods] Property.
[46] There are two problems with this submission. First, although the motion judge appears to view the need, in considering the equities, to look beyond the legal priorities created by the instruments registered on title, he limits his equitable considerations to: (1) a recitation of the legal priorities; and (2) the single additional question of whether there was consent “in a manner that was intended to affect its right in the [Woods] Property” (emphasis added). The motion judge had to look beyond these considerations. He had to consider all of the facts and circumstances in order to decide whether consent should be inferred and whether equitable principles, such as estoppel, applied in making the determination to vest out Home Depot’s interest.
[47] Second, although the motion judge refers to his earlier analysis of the equitable considerations and the need to take them into account in the weighing exercise, that earlier analysis was, as I have explained, tainted by his understanding that he was limited to undisputed facts and could not draw inferences.
4) There was no basis from which to draw the inferences sought by Home Depot
[48] In the alternative, the respondents argue that even if the motion judge erred with respect to his ability to draw inferences, this court should find that there was no basis from which the inferences sought by Home Depot could be drawn.
[49] As I would remit the matter to the Superior Court of Justice, it would be inappropriate for this court to draw inferences and make findings of fact. In order to address the respondents’ submission that there was no basis in the evidence to draw relevant inferences, I must, however, review the record to determine whether facts exist from which a motion judge might draw at least one of the inferences sought by Home Depot. I will focus on Home Depot’s submission that the motion judge ought to have inferred that Romspen knew of and by implication consented to the Ground Lease. If such an inference were drawn, it would clearly be a significant fact to be weighed in resolving the issues raised in the motion.
[50] In my view, there are several facts from which such an inference might be drawn, for example:
the earlier Romspen mortgages provided that Romspen could not unreasonably withhold its consent to any lease by Woods;
in November 2005, Romspen received a copy of the Home Depot Agreement which contained the material terms of the contemplated ground lease to Home Depot;
the Home Depot Agreement contemplated the construction of a store on the Home Depot Lands within 270 days of the signature of the Home Depot Agreement;
the Home Depot Agreement set out the terms of the Ground Lease and contemplated the purchase of the Home Depot Lands by Home Depot if severance had been obtained or the Ground Lease if severance had not been obtained (these broad terms were known to Romspen);
although Romspen refused to provide an acknowledgment that it would provide a partial discharge to allow Home Depot to purchase the Home Depot Lands, Woods asked Romspen to sign an acknowledgment that a portion of the industrial building located on the Woods Property could be demolished to allow construction of the Home Depot store without accelerating the Romspen Mortgage. Romspen was asked to provide this acknowledgement so that Home Depot would not “stop moving forward.” This acknowledgment was provided in May 2006 and refers to a proposed ground lease between Woods and Home Depot;
the Romspen Mortgage included a provision that contemplated that “any land lease payments made by Home Depot pursuant to the Home Depot Agreement ... which in aggregate exceed $250,000 shall be due and payable, on account of principle, upon receipt and [Woods and TDCI] shall direct Home Depot to make such payments directly to [Romspen]”;
the Site Plan Agreement executed by Romspen made specific reference to the Home Depot Agreement and to the proposed partial demolition of the existing industrial building;
under the Site Plan Agreement, Romspen would have known that Home Depot was spending millions of dollars to build a store on the Woods Property and that, pursuant to the Home Depot Agreement, Home Depot was entitled to enter into the Ground Lease; and
Romspen’s representative testified in cross-examination that, by August 2006, after the Site Plan Agreement had been signed, he was able to draw the inference that Home Depot had received the Ground Lease.
[51] These are some of the facts from which an inference might be drawn. Of course, there are many facts that suggest that the inference should not be drawn. I need not list them here. Suffice it to say that a basis does exist from which a relevant inference could be drawn and, contrary to the respondents’ submission, I do not view the motion judge’s error as being necessarily harmless.
5) Even assuming that the inferences sought by Home Depot could be drawn, the equities still favour vesting out Home Depot’s interest in the Woods Property
[52] The respondents argue that regardless of the inferences that might be drawn, the equities will still inevitably favour the vesting out of Home Depot’s interest. I disagree. The inferences Home Depot argues ought to have been drawn are central to the decision of whether to vest out its interest. This decision therefore cannot properly be made until the fact-finding process, including drawing reasonable inferences, is complete. That fact-finding process is more appropriately done by the Superior Court.
CONCLUSION
[53] I would, therefore, allow the appeals, dismiss the cross-appeal and remit the matter to the Superior Court of Justice for a new hearing. If the parties cannot agree as to costs, they are to make brief written submissions within 20 days hereof.
“Paul Rouleau J.A.”
“I agree John Laskin J.A.”
“I agree M. Rosenberg J.A.
RELEASED: December 22, 2011
[^1]: A motion judge can, in appropriate circumstances, order the trial of an issue pursuant to rule 37.13(2)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.